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With a charge of $427 million for transferring a pension plan, the ATM and payment hardware and software maker saw earnings fall, but free cash flow continues to move in the right direction.

ATM and payment hardware and software maker NCR Corporation (NYSE:NCR) reported its Q2 2015 earnings on Tuesday, giving investors news of a rather lackluster quarter. Revenue came in at $1.6 billion, down 3% year over year, and the company's software revenue was down 1% year over year to $440 million.

However, on a constant currency basis, things looked a little better for the company. One of the brighter spots in Q2 came from the company's cloud computing segment, which increased revenue 8% year over year, or 9% on a constant currency basis. Hardware sales, the company's largest revenue driver, increased 6% on a constant currency basis to $622 million in the quarter.

On the earnings call, NCR CEO William Nuti spoke optimistically about the company's expansion into more software services, saying, "While it's been by design, over the medium to long term, consistent mid- to high-single-digit software-related revenue growth will continue to positively impact our top line, margins and free cash flow."

And speaking of free cash flow ... NCR managed to increase that number by $92 million -- to a total of $95 million -- in the quarter, due to improvements from operations, lower capital expenditures, and lower discontinued operations. Those improvements also helped push net cash from operating activities to $167 million.

Where the losses came fromEven with some growth in its business segment, NCR posted an operating income loss of $266 million, which dragged down its diluted GAAP earnings per share to a loss of $2.03. Adjusted for non-recurring costs, EPS came in at $0.66 per share -- topping Wall Street estimates of $0.60.

NCR Corporation says the losses stem from a $427 million non-cash charge for settlement of its London U.K. pension plan. The cost comes as NCR is attempting to "de-risk" its global pension portfolio and turn it over to an insurer.

On the earnings call, NCR Chief Financial Officer Robert Fishman said, "Our de-risking strategy focused on plans which posed the largest enterprise risk to the company and over the past few years we have been working to either shrink or terminate them." NCR says the move should reduce global pension liability by about 19% and help increase cash flow.

In addition to the aforementioned pension settlement cost, the company also had an $8 million restructuring charge in the second quarter, which helped push down operating income numbers.

The SEC is backing off Investors will be happy to know that a previously disclosed investigation by the U.S. Securities and Exchange Commission looks as if it is coming to an end. NCR said in its earnings release:

We were informed by the staff of the Securities and Exchange Commission that it does not intend to recommend an enforcement action against the Company following a previously disclosed investigation concerning certain aspects of the Company's compliance with the Foreign Corrupt Practices Act.

NCR didn't fill in any more details in the release or the earnings call, but it appears the company is able to move on without further inquiry into the matter.

Looking aheadIn the current quarter, NCR expects revenue in the range of $1.63 billion-$1.65 billion. The company also expects operating income to fall between $158 million and $168 million, which would be an increase of up to 309% year over year.

For the full 2015 outlook, revenue guidance is $6.53 billion-$6.68 billion, with earnings per share estimates of $2.60-$2.80. NCR said that it continues to focus on increasing its free cash flow through 2015, noting that it's one of the company's "key areas of focus" right now.